Cost of electricity blamed for sluggish manufacturing industry

The report by ADB indicates that Kenya has the largest manufacturing industry in the region at 11%

The manufacturing industry in East Africa is lagging behind mainly due to the high cost of electricity and poor infrastructure.

This is according to the Eastern Africa manufacturing sector report released by the African Development Bank which has also ranked Kenya’s manufacturing industry the highest in the region at 11 percent compared to Ethiopia’s 3.8 percent and Tanzania’s 10.1 percent.

East African Countries have been addressing issues affecting cross border trade which include non tarrif barriers in a bid to improve trading among EAC member countries.

However, a report by the African Development Bank on the state of the manufacturing industry in the region shows that lower trade across borders has been a key impediment to the growth of the manufacturing sector in East Africa.

Nonetheless, the report indicates that Kenya has the largest manufacturing industry in the region at 11% followed by Tanzania, Burundi and Uganda at 10.1%, 9.8% and 8.6% respectively.

Ethiopia’s manufacturing sector is lowest at 3.8%. These low figures according to the report have also been driven by challenges in infrastructure and electricity challenges.

And to ensure that the Eastern Africa region gets an edge in the manufacturing sector, the report recommends that countries should induce savings to finance growth as well as foster a competitive business environment.

In Kenya, agro processing has the biggest share in the manufacturing sector at 39.7%.